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Mad Money

News/Business. (2013)

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Cramer 12, Us 10, Mexico 6, S&p 6, Apple 6, Aubrey 5, Amazon 5, Washington 4, Aubrey Mcclendon 4, Eric 4, New York 4, Mississippi 3, Florida 3, U.s. 3, China 3, North America 3, David Demshur 3, Mitch 2, Mcclendon 2, Wesson 2,
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  CNBC    Mad Money    News/Business.  (2013)  

    January 30, 2013
    11:00 - 12:00am EST  

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the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. begins with back pain and a choice. take advil, and maybe have to take up to four in a day. or take aleve, which can relieve pain all day with just two pills. good eye. > i'm jim cramer. and welcome to my world. you need to get in the game. firms are going to go out of business and he's nuts, they're nuts! they know nothing! i always like to say there's a bull market somewhere -- "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money," welcome to cramerica. other people want to make friends, i'm just trying to save you a little money. my job is not just to entertain you but to educate, so call me at 1-800-743-cnbc. even on days like today where
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the fed didn't say anything we didn't already know, but people used it as an excuse, an excuse to take some profits. dow dipping 44 points, s&p sinking .39%. nasdaq declining .36%. you can feel the pain -- >> the house of pain. >> it's the pain of the bearish money managers being overridden by the -- you guessed it. and that's precisely why i don't expect this pullback to last too long. because we have a powerful force pushing this market higher. i'm talking about the herculean attempts by money managers to keep up with the galloping averages and the heartache those averages are causing. >> all aboard -- >> all right. lots of people have been talking about the return of the little guy to the market and how that's driving stocks higher. oh, yeah, it's a factor. it's only a piece of something
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much bigger that may be behind a huge amount of this historic january advance that i got to put in context for you and i've got to do it tonight. it all begins with a fourth quarter gross domestic product number we started the day off with. here we go again, .1% drop. especially when you consider the 3.1% gain we had in the previous quarter, that's amazing. this number was mind-numbing. when i saw it, i shouted o-m-g. but of course, no one could hear me because at that moment i had no voice whatsoever. instead of this ridiculous froggy master imitation i'm doing right now. all right. anyway, the gdp number reeks of recession. but in truth, many things that are happening in this market stem from that number. i think two factors caused this incredibly poor gdp performance. one man-made and one caused by mother nature.
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i'm talking about all that chatter about the fiscal cliff, and hurricane sandy. let's start with the former. you know what? we never have a good memory for the fear certain events engendered, but it was only a month ago that our country seemed on the verge of an astounding series of negative events courtesy of that cliff. the air was thick with charges and anger and partisanship. frankly it was kind of insane. the worst since congress after the civil war. it was a terrible time for the republic. we were the world's laughing stock, it was impossible, impossible for individuals or companies to figure out what they could possibly do without knowing what would happen with their taxes. the uncertainty was horrendous, the mood sour. we were getting all sorts of cross currents about what would happen with corporate and personal taxes. were they going to raise taxes, were capital gains going up? would the alternative minimum tax ensnare millions of people? would businesses have to start a
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whole brand new round of layoffs? executive after executive came on this show to say, look, we can't do a thing. what's the point? we will just have to undo it. business confidence plummeted, and the idea of forming a new business. well, remember when the ceo of paychex came on and talked about the paralysis caused by the cliff? who would leave his job to start a new business in that environment? okay. retail sales weren't that bad. but they nose dived right at the end of the quarter. retailers were afraid to restock inventory, figuring that spending would drop off the cliff right along with the nation's finances. it was all in all a very bad time for our nation. now, overlay the storm of the
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century for the northeast, one that shut down the wealthiest area of the country for several weeks and caused what ultimately may be $100 billion in damage. you had the physical shutdown from the storm neatly and miserably dovetailing with the mental shutdown caused by washington. the result, the abysmal and artificially reduced gross domestic product number we saw today. most money managers are fixated on that top-down analysis. they look at those numbers, they care, they correctly detected the cessation the business in this country was undergoing. they pulled in their horns because of it. some cases, dramatically. i understood it. say we came in to 2013 over the fiscal cliff. i would say the vast majority of money managers out there believed we could be down 5%, 6%, 10% on the s&p, and there
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was no sense in taking that kind of beating. why not raise cash coming into the year? why not raise cash the last week of december? at the same time, individuals wanted to beat the higher taxes. many cashed out on their gains in their personal accounts, in their i.r.a.s. they raised cash knowing they might need that cash to pay much higher taxes, the taxes that a failed attempt to fix the cliff would produce. a huge amount of dough moved to the sidelines immediately. companies themselves accelerated dividend payouts, putting tens of billions of dollars into the hands of shareholders who had no idea what to do with the money other than sit on it. so we came into the new year and we were paralyzed. inventories lean, huge part of the country damaged by a storm, totally dysfunctional food fight animal house government, and we're brimming with cash everywhere, for the biggest
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rainy day of all, the day we jumped over the cliff. but then we don't do the cliff dive. and contra to stock seer bob dylan, the hard rain, it didn't fall. in fact, we didn't get that much. we didn't get dinged except for the rich, who are the most able to handle it. all right, yeah, i can make a big deal about payroll tax thing, that's no problem. nevertheless, it's a small fraction of what we really feared. stocks kept their favored status, including relatively low taxes on dividends. something i do not know a soul who predicted. so we get a huge case of sellers remorse and the stock money comes right back in, the business that was put on hold comes pouring back, hiring begins again, business formation restarts, inventories get rebuilt and we get a totally different january from one that anyone expected. sure we can try to make a big deal out of this sequestration. i won't. i think it's a huge mistake to do so. we have a breakout of peace in washington and the big business
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money has flowed to eric cantor, not speaker boehner who's viewed with suspicion by corporate executives. and cantor doesn't want the business of the country derailed anymore. he recognized that's, well, bad for business. >> all aboard! >> that means we get either a peaceful solution on sequestration or we get the government to cut. which, by the way, most americans view as virtuous. on top of that, you know what we do? we keep those super low rates that ben bernanke's fed committed to again today, making dividend stocks with their terrific tax status ever more cherished. meanwhile, housing is gaining steam, inventories are lean. at the same time, we haven't even started the massive sandy rebuild. this confluence, while fabulous for our nation, happens to be a nightmare for money managers. a ton of the money coming in is going right to the s&p 500, and that's off like a rocket. plus the dow jones average
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chock full of companies that benefit from overseas markets which are improving, including europe, yes, europe, well, they're trooping higher too. that means bearish money managers, they have to scramble to keep up with the joneses and the s&ps. they're competing with the passive indices to justify their own reason for being. the gigantic buybacks executed every day make the job more difficult. there's not enough stock around to sate all these buyers. okay. now at a certain point, the market's got to cool down, as those who took the big risk of buying when others were selling, well, you know what? they ring the register. they cut back some of their holdings. that's today's markets to a tee. plus, when valuations get stretched, as they're being now, earnings have to be pretty darn good to justify the runs, although we all know that disappointment produces dips that bring in buyers, not sellers.
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but good earnings like we had tonight from sky works, jdsu, qualcomm, citrix and, you know, decent numbers from facebook, they can and probably will cause a buying panic with all of their bright tidings. all right, here's the bottom line. it's clear. fund managers have to chase stocks and put money to work. on up days and even down days like this one to keep up with the averages that are benefitting from washington's exit from the business pages, and that robust housing market aided by the coming sandy rebuild. we can have breathers like today, but you know what? they are pauses that refresh and nothing more. robert in new york. robert? >> caller: long time listener from day one, mr. cramer. first-time caller. >> well, tonight will be a challenge to listen because of my voice, but i appreciate it. >> caller: clf recently announced a fourth quarter $1.4 billion noncash goodwill impairment charge. jim, can you please explain what that means and how it plays into
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dave einhorn's bearish downgrade of iron ore and the ramp-up in china. is cliffs a buy, hold, or sell? >> i'm not a cliffs guy. they overextended themselves. if you want to play, my charitable trust owns vale. they've already reduced expectations and i think it can go higher. there's a powerful force at work, people, in this market. money managers desperate to keep up with the averages. i think it will make pullbacks like today brief pauses on a trip to higher levels. "mad money" will be right back. coming up -- core position? oil prices are back in the rise and domestic production continues to expand. wondering how you can profit from america's energy potential? don't miss cramer's earnings exclusive with the ceo of core labs to discover if it's ready to cash in on crude.
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and later, battle of the behemoths. the prime time retail king that delivers everything to your door versus the maker of gadgets you never knew you needed but now can't live without. the market's picked its favorite, but could things be about to change quickly? stick around for cramer's take, all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. sic:""
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i'm always talking about the north american oil renaissance, that huge surge in domestic energy production made possible by both new discoveries and more importantly new technology for getting oil out of the ground. but i don't stress the value of the technology enough, and how it's being used internationally, particularly to explore in deep waters where big oil finds are
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just now being exploited, given what many people believe to be the permanently higher global price of crude. it's a terrific time to come back to our favorite tech company in the oil and gas industry. i'm talking about core lab, clb, a company that uses its expertise to help oil producers figure out how much crude they have in the ground. core doesn't just gather intelligence, they also do production enhancement. they can tell oil producers the best place to drill their well bores in order to squeeze more crude out of the oil fields. they show their clients how to maximize their return on the investment in a given oil field. in short, if you're an oil company anywhere on earth, you want core labs to help you get the most out of your assets. schlumberger and weatherford have started to compete in the space. now, core labs just reported after the close today, delivered a real good quarter. earnings coming in $1.17, 4 cent beat, better than expected
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revenues, company gave upside guidance for 2013. this is a stock i've liked for ages. we spoke to the ceo one year ago, and since then, core labs is up 10%, good, not as good as s&p over the same period. the long-term record here is tremendous. the first time we had core labs on the show back on august of 2006, stock's given you a 228% gain with reinvested dividends. we've had him on the show seven times since "mad money" began, each time core labs was higher than the last. you're going to want to pay close attention now that we have david demshur back. find out more about the quarter and where his company's headed. welcome back to "mad money." >> hey, jim, thanks for having us back on "mad money." glad to be here. >> first, do we have a lot more oil than we realize both in this country and the world? because the places you're exploring, most of them i've never even heard of. >> well, yeah, jim, if you look at some of the unconventional resources in north america, there's a bountiful number of plays that are left to be discovered. and so the amount being produced
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today is at about a 15-year high in crude oil production. when we look at plays like the bakken, the eagle ford, and core labs believes there's one, possibly two more oil unconventional plays left to be discovered in north america. so, yes, with added technology, with fracking and our fracture diagnostic technology, we are helping our clients recover more and more of this unconventional oil. >> there may be two more big ones that we don't even know about yet? >> yeah, we believe there's one, possibly two more left in north america that will come out over the next couple of years. >> that's incredible. now, i also detect some countries, looks like to me that mexico's getting back in the game and starting to drill much more seriously than it used to. >> yes, jim, that's exactly right. mexico's looking offshore now in the deep water. as you know, the gulf of mexico deep water has been prolific, and that trend curves around towards mexico. so you will see over the next several years, a lot more
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deepwater plays offshore mexico. we believe there's potential there for billions of barrels of additional recoverable oil. if you look at mexican production, it's off some two million barrels. they need this deepwater development and core lab will be there to help them. >> i know mexico's deregulating the gasoline. they have much more money. they're committing right now to much bigger projects. >> yes, and this includes, again, the offshore where some of these wells could cost $100 million to $300 million to drill. and when wells are that expensive and these environments are that hostile, you need a lot more science to be used, and when a lot more science is used, they call on core laboratories. we look at their rock properties, their fluid properties to ensure that they recover the optimal amount of oil and gas every day, but more importantly, the amount of maximum oil to be taken out of that reservoir over the life of
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the production of that well bore. >> you're also the first company i've seen that is actually really starting to make money in iraq. >> yes, that's right, jim. we now have 12 projects in iraq. they are some of the most profitable in the company. we are working on the redevelopment of those fields in the south. some of the big fields there. but also, there's been discoveries in the north up in the kurdistan area. it's difficult to push more oil out of those. however, using core lab technology, we're going to show our clients there what's the best way to have maximum recovery from these reservoirs that are undersaturated in natural gas. >> and you're going back to older fields. i know the north sea. we had statoil on. the north sea is supposed to be running out of oil, but they're bringing you back in to find more? >> that's correct, jim. we're working on a number of projects. a record number of projects in the north sea out of our aberdeen advanced technology center. and what we're trying to do is lessen the amount of water cut
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and increase the amount of oil production out of some of these old wells. the north sea started to produce oil and gas back in 1975, so it is an aging petroleum province. aging petroleum provinces are perfect for core lab because our technology will help them as you say squeeze more oil and gas out of those older fields. >> last question, a lot of the other companies that i deal with and service, they've been hurt by weak natural gas prices in the united states. that is not hurting core labs, is it? >> that's right, jim, if you look at our technology, it's better applied to international crude oil related projects. so if you look at our revenue mix right now, we are fully 80% crude oil and 20% natural gas. half of that natural gas revenue comes from large lng developments like we have novell in the eastern mediterranean, anadarko in east africa, chevron and exxon off the west coast of australia. so these large lng plays play into our strength, as well. >> well, i've got to tell you. this is the best quarter i've
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had you on of all of them. so thank you very much, david demshur. >> thank you so much, jim. our seventh time has been a real pleasure. >> the stock tends to get hit after the company reports, and then you buy. i don't know if it's going to get hit this time. that's how good clb's quarter was. david demshur of core labs is bankable and so is the company. stay with cramer. coming up, battle of the behemoths. the prime time retail king that delivers everything to your door versus the maker of gadgets you never knew you needed but now can't live without. the market's picked its favorite. but could things be about to change quickly? stick around for cramer's take. ♪
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it's like a sauna in here. helping you save, even if it's not with us -- now, that's progressive! call or click today. no mas pantalones!  living with moderate to semeans living with pain.is it could also mean living with joint damage. humira, adalimumab, can help treat more than just the pain. for many adults, humira is clinically proven to help relieve pain and stop further joint damage. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections or have symptoms such as fever, fatigue, cough, or sores.
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you should not start humira if you have any kind of infection. ask your rheumatologist about humira, to help relieve your pain and stop further joint damage. the first thing you need to know about wall street is that there is no such thing as equal justice under the market. you can't expect all stocks to
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be treated fairly, and you'd be insane to think all stocks will be treated equally. that's not how the game works. we have a system where different types of stocks are treated in very different ways. i know this is something that can be incredibly confusing to people. let's take a moment now to explain using two household tech names that just reported. i'm talking about apple and amazon. how does what's happened with these two stocks make sense? last week apple reports a less than stellar quarter, but they managed to beat the street's estimates. it doesn't matter. stock gets pounded, falling some 64 points or 12.4% on a single day. >> the house of pain. >> the iphone numbers were a little light at 47.8 million versus estimates of 48 million, but apple sold more ipads than expected, and the gross margin was better than investors feared, yet the stock still got
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put through the meat grinder. then last night, amazon reports a flat out miss. the company earned 21 cents when the analysts were looking for 27 cents. the street was expecting to bring in -- amazon to bring in $22.6 billion in revenues. they fell short of that number by more than $1.3 billion smackers. wow, what a shortfall. now, amazon has an incredibly lofty valuation, selling for 68 times next year's earnings. and that's without backing up the $137 billion in cash they're sitting on. so you'd think when amazon disappoints, it would get hit much, much harder than apple because high-multiple stocks that miss the numbers have much farther to fall. yet, that's not what happened. instead, amazon shot up roughly 10% in the aftermarket, not down 10%. up 10%, as investors decided the quarter was actually a thing of beauty despite the missed
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numbers. amazon managed to deliver higher gross margins, what they make after the cost of sale, and finished today's session at $272, up $12.41. how the heck does that make sense? isn't this just another example of the market's utter ridiculousness? no. it would be crazy if apple and amazon were playing by the same set of rules, but they're not. amazon is viewed correctly as a turbocharged growth stock. it's taking share and investing huge sums of money to build out its business in order to become the premier global e-commerce and fulfillment company. and when you have that kind of growth trajectory, the market will let you get away with almost anything. apple used to be viewed as a growth stock just like amazon, hence the long run up to 700. but now it's lost the patina of growth.
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people are skeptical. they're asking questions, they're demanding answers, particularly why apple isn't using all that cash to get more growth or earnings or something. because it isn't doing diddly right now. amazon, their growth is seen as real and sustainable. let me drill down so you understand this growth/nongrowth dichotomy because it's really important. amazon can get away with so much more than apple because they still got that aura of growth. for example, amazon can say they're investing in china. give us no more detail than that. people lap it up. yet, we demand to know exactly how many iphones apple is selling in china right now to the unit. amazon can say they can't keep up with demand for the paper white, the ereader, and nothing more, give us no other details. who knows how many they've made, sold, how much money they're making on them? can you imagine if apple didn't spell out how many tablets it sold? if apple didn't make enough, we would call them idiots for missing the whole holiday season.
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when asked if they're going to have new devices, amazon says stay tuned. we would tar and feather apple management if they said something like that. meanwhile, we are so worried about apple maintaining the huge gross margins it has. we're thrilled amazon shows us a teeny weeny increase. we want apple to predict with great certainty how many devices it'll sell. but amazon, it makes a point within the text, not the boilerplate opening, that it's not possible to accurately predict demand and therefore actual results that could differ materially from our guidance. this right after apple says it's going to give very realistic guidance. how much is amazon making on its third party fulfillment, meaning letting others tap into the supply chain to deliver goods quickly? how about, oh, hundreds of
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millions of units worth, tens of billions of dollars? what is this like mcdonald's selling billions and billions of burgers? does that count as disclosure too? let's try to pin amazon down. they did in a previous release give us a detailed breakdown of what they're doing. we learned, for instance, that third party sellers sold enough santa hats to be able to wear a new hat for santa, to be able to wear a new hat every day for the next 137 years. number of santa hats per share ratio. they sold enough guitar picks to give one to every attender of woodstock. the old price to pick analysis. they sold enough tea lights to keep a votive illuminated continuously for over 200 years. the all-important votive to sales ratio!
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does amazon make more money fulfilling other people's products than their own? that's for us to know and you to find out. that's how the company works. we did find out that ebooks are up big and amazon owns the ebook category. but how big? guess again. sorry, none of your beeswax. amazon's conference call had fewer facts than a donald rumsfeld speech. so what gives here? well, first, they can get away with it because amazon has virtually no competitors, which means when they want to, they can start showing all the earnings they want. they just have to stop spending to invest in new business. but like netflix and salesforce.com, the other two spendaholics, amazon wants to take over the world. that costs money. apple, apple's like a realist painter. winslow homer, rembrandt, the four walls of the canvas.
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it's trapped in an unfair world of realism. amazon, it's an abstract artist. it's a rothko. and its share price defies what you would expect at conventional stock auctions. amazon still has the visionary founder and ceo. netflix, another high-flier, it has its founder reid hastings at the helm still, salesforce.com, marc benioff calling the shots. amazon has visionary bezos, and the price can be infinite, bezos, laughing all the way to the bank. apple has real competition from samsung, with an android operating system from the visionaries at google. sure the market's big, but samsung's beating apple in cell phone share and perhaps more important, apple's phones may not be good enough to take that share back. tablets are terrific.
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but apple's lost the invinceability that extends to the tablet market. apple has compounded the problem by releasing a faulty map app, a new cord, and i like the old one, and a disliked itunes iteration. it's no longer the only game in town. amazon's total addressable market if it can perfect same-day delivery, which it is going to do with all of these warehouses, is literally all of retail, everything, everything sold at costco, walmart, supermarket, department store, food store, hardware store around the globe. maybe one day amazon will sell houses and boats if u.p.s. can figure out a way to deliver them. the addressable market may be no larger than the personal computer and cell phone replacement segment. and many think in a few years, those markets will be saturated. nobody will be able to get the cheap capital again to build the network that amazon's building. the moat, it's huge, they live in camelot.
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apple lives in a well populated neighborhood. the market says they're on the wrong side of the tech tracks, even as i know only one person who uses anything except apple and that's steve balmer, my college friend who runs microsoft. i didn't hear anything from blackberry today that would convince me the erosion won't continue. but the market's saying so what. apple's a has been and amazon's future has never been brighter. amazon makes money selling the eblades, the business model is loved. apple, though, is a razor. apple has to constantly innovate, but the old razors are working real well with the new blades. the valuations for amazon, anything, eye of the beholder. if apple wants to regain the patina of growth, apple's sitting on $137 billion of cash, amazon's market cap, $123 billion, apple should buy amazon. something to restore the company's status as an invulnerable growth stock.
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here's the bottom line. life is unfair. the great stock prognosticator jimmy carter told us that. amazon vs. apple is living proof. i say cry me a river the size of the amazon because apple's rainforest eco system is being challenged by development everywhere. when you have turbocharged growth, you can get away with anything, and reality places no limits on how high your stock can go. apple should bite the bullet and buy amazon, and hey, they could keep jeff bezos as ceo restoring the stock's visionary premium. john in illinois. john? >> caller: hey, jim, how you doing? >> all right, what's going on? >> caller: i got a crazed super computer for you, man. company headquartered out in seattle, washington, i did a little homework on it. i found good cash, little or no debt. but the one thing that stood out to me, i was wondering because
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of the limited -- possible limited market is the future growth. is it -- can we see -- >> no, you know what? i think you got a winner, but i think you should take half off the table. i looked at that company before, i'm shocked it's gotten this high. i think it's too risky. i want you to cut it in half. sometimes the market isn't fair. the market wants growth, amazon has it. apple, it's got enough, but i've got to tell you, the market regards it as subpar growth now. and apple, look, if they want to do it -- if they want to get it back, they've got some real work to do. stay with cramer.
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it is time -- it is time for the "lightning round" on cramer's "mad money." rapid-fire calls, you say the name of the stock, i tell you whether to sell or buy. play until this sound and the "lightning round" is over. are you ready, ske-daddy? robin lynn in mississippi. robin? >> caller: is it wrong for me to want to hold on to or buy more
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of my sandridge mississippi stock? i really like the dividend. >> i do too. i think you're okay in that dividend. i would stay in that stock. let's go to eric in florida. eric? >> caller: jim, symbol -- >> speculative and red hot. understand people are saying there's a bubble bursting in 3d. be careful, it's a good company. but the stock is very rich. i still like the concept, though. let's go to robert in new york. robert? >> caller: jim, a real big b-b-boo-yah for joseph a. banks. >> no, i'm looking for a 15% off sale. a two for one. i don't like that quarter at all. let's go to eric in california. eric? >> caller: hey, boo-yah, jim. >> boo-yah, chief. what's up? >> caller: thank you for taking my call. a question for you, i have duke energy and i have energy transport. which -- >> no, sell energy transport. >> sell, sell, sell -- >> duke is one of my absolute
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favorites. no, one more, nancy in maryland. nancy? >> caller: jim, it's nancy. >> how you doing? >> caller: great. arcadia national i'm interested in. >> no, too hard for me to understand. i'm not an owner of that, i'm not a buyer. ed in new york? ed? >> caller: jim, honey and lemon boo-yah to ya, i hope you feel better soon. >> i'm doing my best, partner, what's up? >> caller: what's going on with sandridge energy? >> it's a fight over who owns it. i've got to tell you, i think with oil going higher, you stay at eight and when it gets to eight -- >> sell, sell, sell -- sell, sell, sell -- >> and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. coming up -- you plan, you play, you try to be perfect. but can your strategy stand up to cramer's test? call, e-mail, or tweet @jimcramer to find out if your
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portfolio has what it takes in "am i diversified?" >> nobody is more passionate about the market than i am. nobody in this whole country. >> i wanted to thank you, you have saved my retirement. >> you are why i come out here and do this show. thank you so much. >> the stuff that you're doing for all of us is so important and i just want to say thank you. >> my husband and i watch every day and we count on your help for small investors like us. >> put cramer's 30 plus years of experience to work for you. "mad money" weeknights on cnbc. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade.
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with the s&p above its key 1,500 level and the dow approaching 14,000, many are questioning how much higher can these averages run, and how can you keep making money when the market decides to take a breather much like it did today? the answer, my friends is diversification. this market may have you excited. it's a terrific place to be
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right now. but it's vital that you don't keep all your eggs in one basket no matter what. and that's why we play, "am i diversified." this is where you call me, tell me your top five holdings, and i tell you if your portfolio is diversified enough. let's start with a tweet from @dirkfall, who writes my from 90 to 120 list, berkshire hathaway, vmware, celgene, caterpillar, deere, would i be diversified? let's go to work here. berkshire itself is a diversified company. caterpillar, machinery. vm ware, software. deere, machinery, okay, come back, celgene, drugs, yes, we're going to have to get rid of deere if we keep c.a.t., it's too similar, they do tend to trade together. why don't we be in a tech? let's be in qualcomm, just reported a great number, should satisfy everybody.
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no, not me, just a second. too much like vmware. let's do -- i've got an idea, let's do home depot, a retailer that has nothing to do with the rest of these stocks and is one i'm buying for my charitable trust actionalertsplus.com. mitch in arizona. mitch? >> boo-yah, jim. >> boo-yah. >> how's it going today? >> been better, thank you. what's up? >> caller: okay. well, i just wanted to thank you and your staff for the great job you guys do. you can't put a price on your entertainment. >> you're terrific, thank you so much. >> these stocks i've had for a couple of years now, i want to see if i am diversified. >> okay. >> caller: we've got plains all-american pipeline, paa. >> yes. >> caller: cvs care mark, cvs, ebay, ebay, american campus
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communities, acc, and las vegas sands, lvs. jim, am i diversified? >> oh, i like this one. okay. let me just make a quick check. i like it. for one reason in particular, because lvs just reported a terrific number after the close. ebay, exchange. let's call it paypal, frankly. sands is a casino, cvs is a rugstore, plains is a nice conservative pipeline company, american campus a reit, very similar in terms of yield, but they're not alike at all when it comes to the business. pipeline, real estate investment trust, credit card company. let's call it that. casino and drugstore, that's beautiful. i love it. how about a.j. in north carolina? a.j.? >> caller: hey, jim, what's going on, man? b-b-boo-yah from appalachian state. >> good to have you.
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good luck in the ncaa, you always do pretty good. >> caller: all right. let me give you my top five holdings. smith and wesson, whole foods, wfm, facebook, fb, new york mortgage trust, and manu. >> wow. college kids know how to pick 'em. first, another real estate investment trust with a good yield, i like it. manchester united, i didn't like it when it came public. it's been a horse. smith and wesson, supermarket, internet play, gun play, sports play, real estate investment trust, appalachian state rocks, i'll see you at the ncaa. maybe not the final four. stay with cramer. coming up -- promise land?
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chesapeake energy founder aubrey mcclendon resigns after an apparent battle with the board, and the stock soars. but tonight, cramer's drilling down to find the real winner. next. living with moderate to severe rheumatoid arthritis means living with pain. it could also mean living with joint damage. humira, adalimumab, can help treat more than just the pain. for many adults, humira is clinically proven to help relieve pain and stop further joint damage. humira can lower your ability to fight infections,
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including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection. ask your rheumatologist about humira, to help relieve your pain and stop further joint damage.
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somewhere the gods are having a belly laugh in irony. they're sitting back and cackling about how on the exact
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same day that aubrey mcclendon departs chesapeake energy, kinder morgan is snapping up the pipeline partner in order to get much bigger in the very business mcclendon personified. what's so comical and twisted about this? aubrey mcclendon built chesapeake on the notion of rising demand and rising prices of natural gas and natural gas liquids would make the business he co-founded into the greatest independent oil and gas company on earth. he had already made chesapeake into the second largest producer of natural gas in the country after exxon mobil, but prices didn't rise for natural gas or natural gas liquids, the feed stock used to make all kinds of plastics. instead, they plummeted. aubrey had bet the company on the idea that natural gas would not only become the dominant power generating fuel it is
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becoming, overtaking coal, but it would also become a major surface vehicle fuel, the latter which makes so much sense, simply didn't happen or take off in time to boost chesapeake. aubrey is saying he's retired, but other sources are saying he was forced out. a victim of the wildcatting ways that have always been his hallmark. but just at the exact moment when he departs, rich kinder, the acknowledged dean of the oil and gas complex in the u.s. swoops up the partner in pipelines in order to get more exposure to the transfer of, you guessed it, natural gas and natural gas liquids from the eagle ford shale among others, two refineries that can turn fuel into plastic. kinder's saying the revolution that aubrey bet his company on is now upon us. aubrey didn't get there in time. i believe that chesapeake's board's decision to remove the man who has discovered more nat gas and liquids than anyone else on earth will mark the bottom in pricing for oily natural gas. kinder morgan knows they will
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need that pipe from the big oily fields in this country before it commits to a huge industrial buildout to take advantage of the cheapness of our natural gas. his timing, it's as exquisite as chesapeake's is awful. you can't blame the board for its actions with aubrey. we know they always like the assets, but they chafed against the man who found them. he pretty much told us that when we visited him in ohio's utica shale last year. and while chesapeake has excellent prospects, aubrey had indeed overstretched the balance sheet and the company had been in retreat mode to meet its cash flow obligations. mcclendon bet the style rankled the board. all that said, though, chesapeake can survive and even thrive if rich kinder's right about the copano buy. i think he will be. we haven't seen the last of aubrey mcclendon. we haven't seen the last of chesapeake. it will downsize but remain a key oil and gas producer. but the real victory here is rich kinder. he can take advantage of all of
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that drilling that aubrey and so many others have done and bring that newfound oil and gas to market, making a real killing for the shareholders and partners. kinder's gotten to the promised land that aubrey dreamed of. his kinder morgan partners is the winner and chesapeake the loser in the amazing united states oil renaissance. stick with cramer.
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